Jayme v.

Alampay (1975)
Topic: Reformation of Instruments – When available

PARTIES:
 Petitioners: Antonio Jayme and Ana Solidarios
 Respondents: Hon. Judge Nestor Alampay and Benito Ong

FACTS:
 Nov. 29, 1972 – Petitioner spouses filed a compliant against private respondents in the COFI
Negros presided by respondent judge for the reformation of instrument and praying that
the Deed of Absolute Sale of the parcel of land in Bacolod executed by them on Dec. 24,
1964 in favor of Benito Ong which did not embody their true agreement be reformed and
declared a Contract of Mortgage and that their property be returned to them upon their
payment of the lon consideration of P16.5K.
 The petitioners allege that they entered into an agreement whereby they agreed that they
will borrow from Ong the sum of P16.5K on the security of the parcel of land
abovementioned. They alleged that the Deed of Sale does not embody the true agreement
which was to constitute a mortgage over the lot. The plaintiffs acceded to the condition
required by Ong (to execute in his favor a deed of sale) for the reason that they reposed
great confidence in Ong, being a good family friend and because they were in dire need of
money.
 The petitioners allege that Ong unjustly refused to execute the proper document of
mortgage and to accept plaintiff’s payment of their loan of P16.5K to him. Ong raised the
defense of prescription. The trial court issued an order dismissing the petitioner’s case.
 The trial court held that the proper remedy of petitioners on the basis of the complaint is
annulment of the sale on the ground of “vitiated consent” which action has prescribed
within the statutory 4-year period.

ISSUES/HELD: W/N the action of the petitioners for reformation of the Deed has prescribed. (NO)
 The lower court erred in holding that the petitioner’s action prescribed 4 years after the
execution of the questioned Deed of Sale based on its prejudgment in its dismissal order
that “the ultimate agreement of the parties was for the definite sale and conveyance of the
property” and petitioner’s action “would not involve, not the reformation of said document
of sale into a mortgage, but inherently the annulment of the Deed of Sale on the basis of
vitiated consent of the plaintiffs in acceding to the conditions required by the respondent.”
 In this case, the complaint for reformation of instrument clearly alleged that the Deed of
Sale did not express the true agreement of the parties and should be reformed into the
mortgage that it actually was. Such allegations are binding for purposes of the dismissal
motion and therefore the applicable prescription period for such actions based upon a
written contract and for reformation is 10 years (Art. 1144).
 Petitioner’s action for reformation and recovery of title was brought on Nov. 29, 1972 less
tha 8 years after the execution of the questioned deed on Dec. 24, 1964 and had therefore
not prescribed.

JUDGMENT: Judgment/order of dismissal is reversed and set aside.

DOCTRINE:
 Action for reformation and recovery of title not banned by a circumstance in favor of a third
party.